Source: USA TODAY
The NCAA announced Wednesday it is not renewing its licensing contract with Electronic Arts for a college football video game, citing legal and business concerns.
The NCAA, EA and the nation’s leading collegiate trademark licensing and marketing firm, Collegiate Licensing Co., are co-defendants in at least two federal lawsuits concerning the use of college athletes’ names and likenesses. EA is the defendant in another, similar case.
In a statement, the association said that because of “the current business climate and costs of litigation, we determined participating in this game is not in the best interests of the NCAA.”
Spokesmen for EA and the Collegiate Licensing Co. (CLC) could not be reached for immediate comment.
Warren Zola, who teaches sports law at Boston College’s Carroll School of Management, said the NCAA’s decision indicates “they are no longer able to handle a jury decision against them. They are taking precautions against a judgment causing them significant financial hardship.”
Zola said that a decision by the NCAA to continue its licensing arrangement with EA “would allow more members into the (prospective class of plaintiffs) able to claim damages.”
One of the lawsuits against the NCAA, EA and CLC is awaiting U.S. District Judge Claudia Wilken’s ruling on whether to certify the case as a class action. That case currently involves a group of former college football and men’s basketball players headed by former UCLA basketball star Ed O’Bannon.
If Wilken certifies the suit as a class action, it could allow thousands of former and current football and men’s basketball players to join the case. That could create the possibility of a damages award in the billions of dollars. In addition, if the plaintiffs were to get everything they have said they are seeking, it would force the establishment of an entirely new compensation arrangement for current NCAA Bowl Subdivision football players and Division I men’s basketball players — one under which “monies generated by the licensing and sale of class members’ names, images and likenesses can be temporarily held in trust” until their end of their college playing careers.
Another case that had been before Wilken pits former Arizona State and Nebraska quarterback Sam Keller against EA, the NCAA and CLC. That matter currently is pending before the Ninth U.S. Circuit Court of Appeals, with the defendants hoping to overturn Wilken’s refusal to dismiss the case.
In May, the Third Circuit Court of Appeals overturned a district court ruling that had dismissed a case involving former Rutgers quarterback Ryan Hart against EA. EA’s bid to have that decision reviewed by the Third Circuit’s full panel of judges was denied, and on Wednesday, District Judge Freda Wolfson in New Jersey ordered the case reopened for further proceedings.
It is likely that Hart’s lawyers now will begin seeking class certification. And if the Ninth Circuit rules in Keller’s favor, his lawyers will do the same.
The NCAA said its current contract with EA expires in June 2014, “but our timing is based on the need to provide EA notice for future planning. As a result, the NCAA Football 2014 video game will be the last to include the NCAA’s name and logo.”
The NCAA added that it “has never licensed the use of current student-athlete names, images or likenesses to EA. The NCAA has no involvement in licenses between EA and former student-athletes. Member colleges and universities license their own trademarks and other intellectual property for the video game. They will have to independently decide whether to continue those business arrangements in the future.”
That potentially raises questions about what will happen with the game in the future. CLC is the licensing representative for hundreds of schools, and a CLC spokesman could not be reached for immediate comment.
Gabe Feldman, director of the Tulane University Law School’s sports law program, said “as long as the game continues to have the names and logos of the schools” it remains viable because “that’s why a consumer buys the game.”
Asked how the NCAA’s decision not to continue allowing its name and logo to be associated with the game might affect individual schools, Feldman said: “There’s no question the schools have been monitoring all of this and (the NCAA’s decision) may factor into their decisions going forward.”
“But,” he added, “the really essential part of the game is the players. … A separate issue continues to be what (EA) will do with the players. Will they make the players completely generic, with no numbers? If they do that, there’s no legal liability. There may be room somewhere between the game as we know it today and no game at all.”
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